EMI, Canal Plus join race
At least Polygram Filmed Entertainment knows that it’s wanted.
Ten companies, equally divided between Europe and the U.S., have put in bids for the studio.
Pearson, EMI, Carlton, Canal Plus, an investment group headed by former NBC prexy Neil Braun and entertainment manager Martin Tudor, and Tom Rosenberg’s Lakeshore Entertainment, are all confirmed entrants in the race. Another four, as-yet-unidentified companies, also bid.
Although Neil Braun declared July 30 that his bid was “from $400 million to $700 million,” informed sources said that most bids came in much higher than that, at around $1 billion. However, no definitive information on the figures was available.
Bidders now get access to the “data rooms” (the real meat of PFE’s figures) and to a detailed presentation on the studio from senior PFE execs. That process starts this week in Los Angeles.
While it’s true that some bidders are interested only in the library, all the offers are for the whole of PFE. That’s a pre-condition of making a bid at this stage.
PFE president Michael Kuhn is keen to find a buyer who will keep the studio and its management intact.
British buyers — EMI, Carlton and Pearson — figure heavily in the list. The participation of these publicly quoted media companies signals renewed interest from the City of London in investing in the film industry.
At present, none of the three entities has substantial film interests.
EMI is one of the world’s largest record companies, valued at around $10 billion. Seagram was in talks to buy EMI earlier this year, but those talks did not pan out and Seagram bought Polygram instead.
EMI toyed with film in the late 1970s. It’s only major success was Michael Cimino’s “The Deer Hunter.”
TV-centric Carlton bought U.K. distrib Rank in 1997. However, Carlton always saw Rank as a library acquisition, and it quickly closed the venerable company’s domestic and international distribution divisions.
Yet the agenda of Carlton boss Michael Green remains enigmatic, and there have been occasions over the past decade when he has flirted with the idea of film, only to get cold feet at the last minute. Carlton also has a joint venture with Intermedia Films to develop “big-budget” British films.
Ironically, Pearson, whose foundations lie in publishing, is the former owner and backer of Goldcrest. The financial travails during the 1980s of this notorious British film company were responsible for turning the City of London away from film.
Despite reports to the contrary, Pearson is not bidding with a partner, but on its own. It principally is interested in snagging PFE’s library.
Plenty of interest
Many companies, investment groups and individuals have declared an interest in PFE over the past few months.
Sources said that Seagram received around 30 inquiries for the company. Investment bank Goldman Sachs, which is handling the sale on behalf of Seagram, then sent a PFE briefing to 20 of them. Half of those made actual bids.
Senior PFE execs were said to be “happy” with the number and level of the initial bids.
Among those known to have studied the PFE prospectus, but not bid, are German media giant Bertelsmann, British congloms Granada and United News & Media, U.S. broadcaster Chris-Craft and billionaire Paul Allen.
Seagram is selling PFE following its $10.4 billion acquisition of its parent, music giant Polygram, from Philips in June. Reps for the Canadian conglom would not comment.
Originally, Seagram chairman Edgar Bronfman Jr. envisioned reaping up to $1 billion for PFE. Polygram supporters have always insisted that the studio is worth that price.
Reports have circulated that Bronfman subsequently lowered his expectations to about $750 million. Some U sources speculated that he was prepared to go lower still, to $625 million.
(Adam Sandler contributed to this report.)